Step 1: Check & Build Your Credit Score
Your credit score determines both whether you qualify and what rate you'll get. The difference between a 650 and 750 score on a $350,000 loan can be $200+/month.
Fast ways to improve your score:
- Pay down credit cards below 30% utilization (biggest quick win)
- Don't open new accounts in the 6 months before applying
- Check all 3 bureaus free at AnnualCreditReport.com and dispute errors
- Stay current on all payments — one missed payment can drop you 50–100 points
Step 2: Set Your Real Budget
Most buyers make the mistake of starting with home search before knowing their true budget. Get the number first.
Don't forget these costs beyond the mortgage:
- Property taxes (1–2% of home value annually, varies by state)
- Homeowners insurance ($1,200–2,400/year average)
- PMI if less than 20% down (0.5–1.5% of loan value annually)
- HOA fees if applicable ($100–500+/month)
- Maintenance (budget 1% of home value per year)
Step 3: Get Pre-Approved (Not Just Pre-Qualified)
Pre-qualification is a quick estimate. Pre-approval is a verified commitment from a lender — sellers take it seriously. In competitive markets, you won't get an offer accepted without it.
Compare offers from 50+ lenders with one form. No credit impact, no obligation.
Get Pre-Approved Free →Pro tip: Get pre-approved with 3–5 lenders within a 45-day window — multiple inquiries in this period count as a single credit pull.
Step 7: Closing Costs — What to Expect
Closing costs catch many first-time buyers off guard. Budget 2–5% of the purchase price on top of your down payment.